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Integrated crisis-energy policy: Macro-evolutionary modelling of technology, finance and energy interactions

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  • Safarzyńska, Karolina
  • van den Bergh, Jeroen C.J.M.

Abstract

Addressing four persistent problems, namely human-induced environmental change, financial instability, inequality and unemployment has now become an urgent necessity. To better grasp complex interactions between technological, financial and energy systems, we propose a formal behavioral-evolutionary macroeconomic model. It describes the coevolution of four populations, namely of heterogeneous consumers, producers, power plants and banks, interacting through interconnected networks. We examine how decisions by all these economic agents affect financial stability, the direction of technological change and energy use. The approach generates non-trivial, even surprising insights, such as that brand loyalty, captured by a network externality on the demand side, can increase the likelihood of bankruptcies of banks. Cascades of such bankruptcies are found to be more likely under greater income inequalities and higher electricity prices. We employ the model to assess macroeconomic impacts of sustainability policies along three dimensions: environmental effectiveness, financial stability and socio-economic consequences.

Suggested Citation

  • Safarzyńska, Karolina & van den Bergh, Jeroen C.J.M., 2017. "Integrated crisis-energy policy: Macro-evolutionary modelling of technology, finance and energy interactions," Technological Forecasting and Social Change, Elsevier, vol. 114(C), pages 119-137.
  • Handle: RePEc:eee:tefoso:v:114:y:2017:i:c:p:119-137
    DOI: 10.1016/j.techfore.2016.07.033
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    Cited by:

    1. Lamperti, F. & Dosi, G. & Napoletano, M. & Roventini, A. & Sapio, A., 2018. "Faraway, So Close: Coupled Climate and Economic Dynamics in an Agent-based Integrated Assessment Model," Ecological Economics, Elsevier, vol. 150(C), pages 315-339.
    2. repec:eee:tefoso:v:122:y:2017:i:c:p:71-90 is not listed on IDEAS
    3. Herrmann, J.K. & Savin, I., 2017. "Optimal policy identification: Insights from the German electricity market," Technological Forecasting and Social Change, Elsevier, vol. 122(C), pages 71-90.
    4. repec:eee:ejores:v:262:y:2017:i:1:p:347-360 is not listed on IDEAS
    5. repec:eee:enepol:v:108:y:2017:i:c:p:12-20 is not listed on IDEAS

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